The Union and The States Relations

Legislative relations : Arts. 245 to 255Administrative relations : Arts. 256 to 263

Financial relations : Arts. 264 to 293

Distribution of Legislative powers:

--The Constitution provides for two fold distribution.

--With respect to territory and subject matter.

Territorial Jurisdiction: Art.245(1)

--Parliament may make laws for the whole or any part of the territory of India.

--The Legislature of a State may make laws for the whole or any part of the State.

According to Art. 245(2) a Parliamentary law shall not become invalid on the ground it has extra- territorial operation.

Thus Legislative power of the Centre and the States is subject to :

Fundamental Rights

Seventh Schedule

Restriction as to imposition of tax on sale or purchase of goods by states, Art. 286(1)

Freedom of trade commerce and inter course, Arts. 301& 302

Theory of Territorial Nexus:

--A law of parliament has extra-territorial operation.

Ex: In Wallace brothers and Co. Vs CIT. Bombay 1948 PC. A British company became a partner in a firm of British India .

Held territorial nexus applies for levy of tax for income derived from India.

Similarly in A.H.Wadia Vs CIT 1949 FC

Gwalior Govt. loaned at Gwalior to a company in British India.

Tax by British India was upheld by applying theory of territorial nexus.

Nexus test was applied to the state legislations also.

• In Bombay Vs RMD Chamarbaugwala(1957) Bombay Lotteries & Prize Competitions Control & Tax Act 1948

• News paper Sporting Star printed & published from Bangalore

• Wide circulation in Bombay

• Imposition of tax on income derived held valid.

• State legislature not a delegate of the Union Parliament

• Both derive power from the Constitution.

• Legislatures are competent to make retrospective laws Subject to Art. 20(1).

Legislatures are competent to over ride judicial decisions- Make a validating Act.

The Legislature cannot delegate its essential legislative functions.

Distribution of Legislative Powers: Subject matter

The GIA 1935 has introduced three fold enumeration.

The Constitution has adopted the same.

U/A 246(1) Parliament has exclusive legislative power to make laws on matters in the Union List of Seventh Schedule – 97/100.

A State Legislature has exclusive legislative power on matters enumerated in the State List – 66/61.

Both parliament & State Legislatures have power to legislate on matters enumerated in Concurrent List-47/52.

The Residuary Powers: Art 248 R/W Entry 97 of UL -----The Parliament has exclusive legislative power on residuary matters

----In USA, Switzerland and Australia States exercise legislative power on residuary matters.

Principles of Interpretation of ListsThe Centre and the States cannot make laws outside

their allotted subjects .The S/C has evolved certain principles to resolve the difficulty.

Plenary power of the legislature.Power to alter the existing laws retrospectively and

prospectively - has power to pass validating Acts.

In State of Mysore Vs D Achiah Chetty (1969) proceedings for acquisition of land of the respondent taken under Mysore Land Acquisition Act 1894 instead of Bangalore Improvement Act 1945—B Act is more favorable to respondent than M Act. Challenged as discriminatory of Art.14—Retrospective validating Act was passed– held valid

Predominance of Union power-

The Union List prevails over the State & Concurrent Lists in case of over lapping

The Concurrent List prevails over that of the State List.

Each Entry to be interpreted broadly

Avoidance of conflict & harmonious construction

Widest possible & most liberal interpretation should be given to language of each Entry.

In Gujarat University Vs Krishna 1963

--Guj.Uni.Act 1949 – Gujarati prescribed as exclusive medium of instruction & examination

Entry 11 of State List – now Entry 25 of Concurrent List empowered to Legislate in respect of education including universities

Subject to Entries63 to 66of Union List – co ordination and determination of standards in institutions of higher learning

As the two Entries over lap the rule of Harmony is required

The Guj Uni Act was struck down to the extent of overlapping

The State Legislature has no power U/E 11 of State List in prescribing exclusive medium of instruction.

In International Tourism Corp Vs Haryana 1981

-The S/C held that the residuary power cannot be given expansive interpretation to cut short State Legislative Power

- The resort to residuary power should be the last refuge.

- S/3 Haryana Passenger and Goods Act 1952

- Tourism Corp. challenged States power of imposing road tax on passengers & goods carried on national highways

- Held valid U/ Entry 56 of State List as such taxes are regulatory & compensatory

-Parliaments power U/E 97 of Union List was rejected.

Pith and Substance/Characterization

Union & State Legislatures are supreme within their respective fields.

They should not encroach/ trespass into the field reserved to the other.

If a law passed by one trespasses upon the field assigned to the other—the Court by applying Pith & Substance doctrine, resolve the difficulty &declare whether the legislature concerned was competent to make the law.

If the pith & substance of law( i.e. the true object of the legislation) relates to a matter within the competence of the legislature which enacted it ,it should be held intra vires—though the legislature might incidentally trespass into matters not within its competence.

The true character of the legislation can be ascertained by having regard—to the enactment as a whole -- to its object – to the scope and effect of its provisions.

In profullakumar Mukherjee Vs Bank of Khulna (1942) the PC applied pith & substance doctrine—S. 100 GIAct 1935 is similar to Art .246 of the Constitution.

The Bengal Money Lenders Act 1940 provided for limiting the amount and the rate of interest recoverable by any money lender on any loan.

Challenged that the Bengal Legislature has no legislative competence. The H/C held the Act intra vires .But the F/C held it ultra vires. On appeal the P/C reversed and held that Bengal Act in pith & substance is within the provincial legislative field.

Money lending in Entry 27 List two. Promissory Notes in Entry 28 List one. The interference was incidental.

In State of Bombay Vs F N Balsara 1951 Bombay Prohibition Act,1949 prohibited sale & possession of liquors in the State

Challenged as voilative of Imports & Exports of liquors a Central subject.

Held the Act in pith & substance fell under Entry 8 of State List and not under Entry 41 of Union List.

Colourable Legislation Maxim: What cannot be done directly cannot

also be done indirectlyThe rule relates to the question of legislative

competency to enact a law C L does not involve the question of

bonafides or malfides.A legislative transgression may be patent,

manifest or direct or may be disguised, covert or indirect.

C L is applied to the latter cases.It is also described as fraud on constitution.In Bihar Vs Kameswar Singh (1952)- Bihar

Land Reforms Act ,1950 was struck down as a C L as it did not provide in fact for any compensation

In K T Moopil Nair Vs Kerala (1961)-Travancore

Cochin Land Tax Act,1955 –struck down as violated - Arts.14 &19(1) (f)—income derived Rs3100 where as tax levied was 54000.– The Act was held to be confiscatory

Repugnancy• Art. 254(1) declares that if a provision of a State law is

repugnant to a provision of Central law made on the same subject in the concurrent list ,then central law or pre existing law as the case may be prevails over such State law.

• In such a case it does not matter which law is first.• Rule of repugnancy applies : when there is a direct

conflict between the two provisions.—one says do and the other says do not—both occupy the same field.

• Though no direct conflict parliament intends its law to be complete and exhaustive on the subject.

• Both laws occupy the same field.-Doctrine of occupied field.

• Such law becomes void to the extent of repugnancy.• Exception: Art. 245(2) a State law receiving the assent

of the president prevails not with standing its repugnancy over Central law.

Proviso to Art 254(2) gives parliament ultimate power to repeal or amend a repugnant State law though it received presidents assent.

Zaverbhai Vs Bombay 1954– Essential Supplies Act 1946

M Karunanidhi Vs UOI 1974 –T N Public Men (Criminal Misconduct)Act 1974.

Parliaments power to Legislate on State Subjects:

--In the National interest : Art.249 –in 1950 due to Korean war—in 1986 though RS passed a resolution parliament did not respond.

--During Emergency: Art. 250—States power to legislate .

--With the consent of two or more States :Art 252—

Implementation of a Treaty: Art.253

Administrative Relati0ns : --Constitution contains elaborate provisions. --They are flexible and permissive and not

rigid. --Executive power is co extensive with

legislative power -- UL—SL—CL it is states responsibility

though law is made by the parliament. --Ex. Electricity(supply) Act 1956 E 38 C L—a

Central legislation but under State administration.

--Industrial Disputes Act 1947 E 22 C L—under both

--Forest(Conservation) Act1980 E 17A CL—added by42 amend.1976 –exclusive Central Control

A lot of centralization of legislative powers –but a lot of decentralization of administrative powers.

Union and States obligations (Art .256)Unions directions to the States(Art.257) – The

States must exercise executive power no to impede or prejudice executive power of the Union .

The centre can give directions as to how the States should exercise their executive power .

Power of central direction extends to 1. construction and maintenance of

communications of National or Military importance. 2. Protection of Railways in the States .

Central Govt. will reimburse the expenditure incurred by the States.Non- compliance will attract Art.356Delegation of Unions functions to States Art.258 1. President with the consent of States either conditionally or unconditionally entrust union executive powers. – Jayanthilal Vs F.N.Rana 64- Land Acquisition Act 1984 2. Parliament can also use State machinery for execution of

Union Laws – consent not necessary. State Governments with the consent of the central Govt. can

entrust their executive powers - By order of the Governor.

Delegated Legislation-Meaning : D L is used in two senses.-1.Exercise of legislative power by a

subordinate authority delegated to it by the Legislature.

-11.The subsidiary rules made by such subordinate authority . Ex. Rules, Orders , Regulations , Bye laws , Notifications etc.

Reasons for delegation:a. The concept of welfare Stateb. Pressure on Parliamentary timec. Technicalityd. Flexibilitye. Experimentf. Emergency

Permissible delegation: - Commencement ; Supplying details ;

Inclusion ; Exclusion ; Suspension ; Modification ; Application of existing laws ;

Impermissible delegation :- Essential legislative functions –Ex. Repeal

of law ; Modification ; Exemption ; Removal of difficulties ; Retrospective operation ;

Future Acts ; Imposition of tax ; Offences and penalty etc.

--In Re Delhi Laws Act (1951)--Edward Mills Vs Ajmer (1955) --Gwalior Rayon Silk Mfg. Co. Vs Asst.

Commr Sales Tax (1974)--Hamadard Dawakhana Vs UOI

(1960)